A lack of supply and increasing demand is pushing up prices of building materials in the UAE, according to the latest statistics released by Abu Dhabi government.

The numbers, released by the Statistics Centre Abu Dhabi (SCAD) yesterday, showed that the price of some building materials had surged in June compared to a month earlier.


In all, SCAD reported rises in the average prices of 15 out of 21 building material groups during the second quarter of 2011 compared with the second quarter of 2010. "It seems the demand pressure is mounting. Domestic supply is unable to cope with the increasing demand. Part of this shortage could be imported," Mohammad Amerah, an Abu Dhabi-based economist told Gulf News. "Prices of imported building materials are going up, The devaluation of the US dollar is a major factor behind the price increases," he added.

Amerah said contractors should think of forming a consortium to negotiate better prices for imported building materials and should try to import them from cheaper markets. The SCAD report presents an analysis of the price movements of various materials used in the construction industry in Abu Dhabi market in June and the second quarter of 2011.

SCAD’s monthly report of building material price surveys the cost of 21 groups of commodities and services that represent the key materials used in construction activity, including cement, sand, wood, steel, concrete and cement blocks.